GST effect on car prices?

This is a discussion on GST effect on car prices? within The Indian Car Scene, part of the BHP India category; Originally Posted by sunishsamuel
its a case of double taxation. Checking with employer and the lease company on the eventual ...

its a case of double taxation. Checking with employer and the lease company on the eventual impact. I heard existing lease rental will go up by 43% Along with the car lease being costlier, i dont think many of us can afford to pay that extra $$. Transfer/selling the car is also going to be expensive.

I am in the same dilemma. As an example for the curious here, my EMI was roughly 33k (for 3yrs) for a Honda City VMT. This goes up to 42k (33k - 14.5% VAT + 43% GST). Further, the final amount to pay after lease (residual value) goes up from 2.4L to ~3L. Overall, this is an increase of about 2.5L+ in what I end up paying, which is straight out ridiculous.

Quote:

Originally Posted by sups

For surrendering cars which are already leased, there will be a big penalty for premature closure. It has to be seen from that angle as well.

Did you check your lease provider and ask for a quote of foreclosure?

Quote:

Originally Posted by HentaiDesi

I plan to terminate my lease in a few days unless there is some clarity on this topic. Would be great to hear what others who are in company car leases are planning on doing.

Am in a big soup too. The problem is, that the government has decided to meet the lease vendors on 30th June. Which is already too late if we have to foreclose the lease.

Does anyone know how long the lease foreclosure might take? If it can happen in 3-4 hours, our best bet is to be ready with the cheque on 30th, and assuming the government does nothing about it (read: double taxes us), we end up foreclosing immediately.

My ray of hope was the fact that a lot of cabs are leased. If several Olas and Uber owners are as royally screwed as we are, don't we think that this deserves some form of public outrage!?

I have already booked pearl blue ZDI in bangalore, which was supposed to be delivered to me by 20th of june...

Now the showroom guys have informed me that the car can be delivered only by next month end... And if i need this month then i have to go with silver ZDI. i am ok with waiting for one more month as long as price does not increase post GST.

Please suggest should i go with silver (boring color as per family) and take delivery this month or should I wait for blue and take delivery next month?

My understanding of the consensus around GST is that the tax component of ex-Bangalore prices of over-4m cars is around 47%, and it will be 43% under GST.

If manufacturers pass this benefit on, it will be due to the GST bill's anti-profiteering clause; otherwise, if they can find a way around it, they will keep the benefit to themselves, as we see from the prices that have prevailed in the below-4m segment.

If the GST paid by auto component suppliers is also different than before, or if that credit available to manufacturers under GST is different than before, that benefit/loss also needs to be factored. Again, only the anti-profiteering clause would make them pass on benefit (loss, they'd willingly pass on anyway).

Whatever the benefit, if any, road tax will reduce proportionately, maybe a few thousands of ₹.

Off-topic, but you mention Ertiga which supposedly can manage 6-7 people without luggage or 4 people with luggage. Is that your requirement? I was interested in Ertiga, but have settled on the Platinum Etios (not booked yet) as I like its 5-people-with-luggage ability.

My understanding of the consensus around GST is that the tax component of ex-Bangalore prices of over-4m cars is around 47%, and it will be 43% under GST.

If manufacturers pass this benefit on, it will be due to the GST bill's anti-profiteering clause; otherwise, if they can find a way around it, they will keep the benefit to themselves, as we see from the prices that have prevailed in the below-4m segment.

If the GST paid by auto component suppliers is also different than before, or if that credit available to manufacturers under GST is different than before, that benefit/loss also needs to be factored. Again, only the anti-profiteering clause would make them pass on benefit (loss, they'd willingly pass on anyway).

Whatever the benefit, if any, road tax will reduce proportionately, maybe a few thousands of ₹.

Off-topic, but you mention Ertiga which supposedly can manage 6-7 people without luggage or 4 people with luggage. Is that your requirement? I was interested in Ertiga, but have settled on the Platinum Etios (not booked yet) as I like its 5-people-with-luggage ability.

Thanks for some insight on probable GST effect on Ertiga.. Just hope its correct...

To answer your question... As of now i am driving a Manza which is a proper 5 seater with good leg support. Mynext car requirement was that i needed to have an option for 7 seater or 5 seater with luggage and preferred maruti brand.

Diesel Ertiga must be ₹10-lakh+. If it is on the border, GST may just bring it under 10 & give you much less road tax? Even otherwise, price reduction would reduce road tax by many thousands, wouldn't it?

When we went to Honda showroom for delivery of dad's WR-V over the weekend, the sales rep mentioned that they will be keeping the showroom open till 10 pm on that day due to high footfalls. Reason: GST. Apparently on the previous day when they were about to close the showroom at 8.30 pm, there were customers walking in even that late.

the biggest gain is for the luxury segment, gaining anywhere between 4- 9%.
Hybrids are the most impacted and companies are likely to steer away from the path after seeing the pattern of sales in the coming months post GST implementation.

Small cars
These are the cars which are not longer than 4 meters and have petrol engines not greater than 1.2 litre or diesel engines not greater than 1.5 litre.
the Renault Kwid STD 0.8 petrol, its current ex-showroom Delhi price is close to Rs 2.65 lakh, but after the GST the price will stand revised at Rs 2.71 lakh.

In cases of diesel variants in the small car segments, the 3 per cent cess will take the tax incidence to 31 per cent. Thus, the price of a Maruti Suzuki Dzire diesel automatic which starts at Rs 7,76,000 would jack up by almost Rs 21,000.

Mid segment cars
A basic Honda city which is priced at Rs 8.71 lakh ex-showroom Delhi right now, would end up costing over Rs 9,000 more.

SUVs - The winner due to GST
The prices of a diesel Toyota Fortuner with manual transmission would come down from Rs 28.26 lakh to Rs 27.21 lakh in Delhi.

SUVs - The winner due to GST
The prices of a diesel Toyota Fortuner with manual transmission would come down from Rs 28.26 lakh to Rs 27.21 lakh in Delhi.

Oh the irony, the biggest beneficiary are DIESEL SUV's and about a lakh cheaper in DELHI no less.

I'm sick of monitoring changes in GST, people thought that it'll reduce prices across the industry in every category but sadly it isn't so. Its also unfortunate that smaller category vehicles aren't being rewarded with lower taxes as they with engines of under 1200 cc and with a small footprint+weight are the vehicles that consume lesser fuel and take up lesser space.. ideal for India.

For those who are waiting for Price Change Post GST, a detailed Price Comparison between Pre GST & Post GST prices of each vehicles & variants across Major Cities will be coming up shortly (Hint - July 2nd Week).

First, M&M and Maruti made the govt fools by introducing mild hybrids. Then govt made them fools with a higher GST rate. But now, I don't think they will continue with the SHVS technology. They will just drop it off from Ciaz / Ertiga.